The board chairman of the Ukrainian Railways public joint-stock company (Ukrzaliznytsia), Wojciech Balczun, has made a presentation on the outcome of the company’s operations this year. The presentation took place at a joint press conference with Minister of Infrastructure Volodymyr Omelian and other top executives of public-sector transport companies.
Balczun said that the main challenge at the beginning of his work in Ukrzaliznytsia was stabilization of the operational situation on the ground. According to him, the company experienced problems not only because of chronic underfunding of fixed assets, but also because there was no stability in its daily management.
According to Balczun, most complaints about the operations of Ukrzaliznytsia were about shortages of railcars, locomotives, and fuel. He said that the important decisions made by the new management of Ukrzaliznytsia included simplification of the tender procedures for procurement of spare parts and fuel. Regarding the latter, Balczun said that the company managed to increase the number of suppliers and achieve reduction of prices. "I can say that we have saved UAH 500 million this year as a result of the reform of procurement," said Balczun.
In addition, according to the head of Ukrzaliznytsia, the company has resumed repair of railcars. "Ukrzaliznytsia should repair about 30,000 railcars annually in order to facilitate transportation at the same volume," he said, adding that Ukrzaliznytsia reached the pace of railcar repairs necessary to ensure normal operations toward the end of this year.
In addition, according to him, efficient operation requires repair of 200 locomotives annually.
Balczun said he expected Ukrzaliznytsia to be profitable in 2016. "We expect to make a profit of UAH 300 million in 2016,” he said.
As reported, Ukrzaliznytsia reported a net loss of UAH 16.78 billion for 2015 (based on the International Financial Reporting Standards), which is 8.7% more than its net loss in 2014. Its sales revenue increased by 21.6% to UAH 60.13 billion in 2015.
Ukrzaliznytsia’s financial plan for 2016 provides for a net profit of UAH 96.8 million on revenue of UAH 78.4 billion. Its net revenue is projected at UAH 74.7 billion, including UAH 66.59 billion from transportation of goods and passengers and UAH 7.83 billion from auxiliary services. The financial plan for 2016 does not clarify the accounting standards used.
